Hospice threatened by Medicare audit

Registered nurse Cherry Miller checks the vital signs of an unidentified patient at San Diego Hospice in Hillcrest Monday. A Medicare audit has brought the hospice's patient admission practices under scrutiny.
— John Gibbins

Registered nurse Cherry Miller checks the vital signs of an unidentified patient at San Diego Hospice in Hillcrest Monday. A Medicare audit has brought the hospice's patient admission practices under scrutiny.
— John Gibbins

The Tribute Garden at San Diego Hospice greets patients and their families as they visit the nonprofit company's main Hillcrest facility.
— John Gibbins

San Diego Hospice, which handles end-of-life care for 4,000 patients a year, temporarily stopped accepting new patients over the weekend as it copes with financial problems brought to light by a federal Medicare audit.

The temporary suspension, which lasted from Friday to Monday, is but one piece of a larger set of problems at San Diego County’s largest hospice program. Those issues could force San Diego Hospice to return millions of dollars to Medicare, Chief Executive Kathleen Pacurar said.

Though she has not yet received the audit results, Pacurar said she believes there will be enough financial pain to require layoffs of up to 200 of the hospice’s 870 employees. Those cuts, she said, will not be made to the bedside workers, who care for dying patients in their homes or in the hospice’s San Diego treatment facility on Third Avenue. But she said they will eliminate programs that are popular among patients and the families of patients.

“The organization, after the first of the year, will look extraordinarily different than it does today,” Pacurar said. “It will be smaller. It will focus solely on the great care of hospice patients.”

She said she has not yet put together a final list of programs that will be cut. However, two programs, one that serves HIV/AIDs patients and a second that provides counseling for families expecting to deliver newborns with life-threatening illnesses, have already been cut.

The news comes as hospice care nationwide is under increasing scrutiny from Medicare for its growing costs. According to a report by the Office of Inspector General, hospice payments increase 56 percent from 2005 to 2009. A 2011 Bloomberg News report pegged the annual value of the hospice market at $14 billion. San Diego Hospice is not the only program to get audited. Other programs across the nation have reported receiving similar scrutiny.

The audits are focusing on whether hospice programs are being too liberal in qualifying patients for Medicare’s hospice reimbursement, which Pacurar said amounts to $172 per day per patient for her operation.

Pacurar said she believes the hospice is vulnerable to millions in rebates to Medicare because the program has not been strict enough in making sure that its patients are truly suffering from an illness likely to cause death within six months. She said doctors and care givers operated for decades on an “open access” policy that kept patients on hospice care for longer than six months, sometimes without being able to demonstrate that their condition was worsening.

“We lost sight of interpreting these guidelines appropriately. We put the concept of patients, and what we were going to be able to do for them, above what the guidelines were,” Pacurar said.

She said her own internal audit, performed by a firm with expertise in Medicare audits, found significant issues with payments received from Medicare that did not have proper documentation that the patient was terminal.

That internal audit, begun after the Medicare audit, was a wake-up call, she said. San Diego Hospice, Pacurar said, started retraining its entire staff with an emphasis on the Medicare guidelines, starting in August. She said she believes admission and discharge policies are not yet perfectly in alignment with the guidelines, but they’re much stricter than they were only a few months ago.